Cement imports rise 64% in Q1; SRP pushed

By Bernie Cahiles-Magkilat

The domestic cement industry has claimed that imports rose 64 percent in the first quarter this year and called for higher protection because the current P210 safeguard duty on per metric ton of imported cement failed to stem surging importation.

Data presented during the first public hearing conducted by the Tariff Commission on the safeguard measure imposed on imported cement showed there were a total of 1.74 million metric tons from 1.06 million MT in the first quarter of 2018.

Officials from the Department of Trade and Industry, cement manufacturers, officials from the Cement Manufacturers Association of the Philippines, importers and consumer groups were among the groups that attended the hearing.

Data showed that imports continued to rise despite the imposition of the provisional P8.40 per bag Safeguard duty imposed on cement imports in February this year. It also showed of 34.5 million ton industry capacity of the 20 cement manufacturing plants scattered around the country. This is just a little gap against rising local demand of 33 million MT.

Industry demand is also expected to rise by 7 percent, but CeMAP said the growth can still be accommodated by local manufacturers.

But due to surging imports, the industry said investment returns for new capacities are not encouraging.

The industry argument has only emboldened consumer group Laban Konsyumer Inc. President Victorio Mario Dimagiba to consider filing a Motion for the Tariff Commission to dismiss the case immediately as CeMAP officials and lawyer Atty Joven Rivera admitted in "open court that the Safeguard duty is needed by the local manufacturers in aid of the expansion projects , but not a remedy to serious injury caused by imports."

LKI has further pushed for the DTI and the local cement industry to set and publish the SRP on cement. The SRP for cement was embodied in the DTI preliminary decision that imposed a safeguard duty of P8.40 pesos per bag as a safeguard on rising cement prices.

Dimagiba said that based on their monitoring, retail prices of cement had raised to P240 per bag as a result of the collection of the Safeguard duty from all imports since February of the year.

LKI has also asked whether or not the Safeguard duty of P8.40 pesos per bag is inclusive or exclusive of 12 percent VAT, and are remitted to the Bureau of Internal Revenue accordingly.

Already, Vietnam’s Ministry of Trade has relayed a statement to the TC noting that cement is an unbound good and therefore should not be subject of DTI’s safeguard measure. Vietnam also raised concern on the development of the imposition of the safeguard measure and hinted of looking at measures of their own.

Some of the country’s cement importation come from Vietnam. Recently, DTI said that all cement importation passed the quality standards, but that they remain vigilant after receiving reports on the alleged proliferation of substandard cement imported from Vietnam.